Avoid Costly Mistakes with the Car Buyer's Checklist

By 12-5-18

In this Wednesday, Nov. 28, 2018, photograph, a large red bow to mark the holiday season sits on the roof of an unsold 2019 Countryman on the floor of a Mini dealership in Highlands Ranch, Colo. Emotions run high when you’re buying a new or used car. So it’s easy to overlook details that could cost you in the long run.

AP photo by David Zalubowski

NEW YORK - In the excitement of buying a new (or used) car it's easy to forget critical details that wind up costing you money. I learned this over more than a decade of buying dozens of test cars for the automotive site Edmunds. No matter how much experience I got, I always consulted my car-buying checklist and updated it based on what I learned.

Once you've decided on the type of car you want, the buying process can be divided into two sections: research and dealmaking. This breaks a seemingly overwhelming job into smaller, more doable tasks.

Here is your car-buying checklist — the crucial steps to help you get the wheels you want at the right price.

RESEARCH

These steps help you locate the specific vehicle you want to buy and strengthen your position when it's time to negotiate.

1. CONFIGURE YOUR CAR. Go to the carmaker's website and decide which model (often called the "trim level") you want and what options you need.
2. CHECK PRICING. Using car sites like Edmunds, Kelley Blue Book or TrueCar, find the car's real market value price, which is what others are paying for it.
3. LOOK FOR INCENTIVES. Check the carmaker's site for incentives, such as customer cash back or low-interest financing, on the model you want.
4. LOCATE YOUR CAR. Search the inventory of local dealerships to find the exact car you want to buy. Write down the stock number or vehicle identification number (VIN).
5. CHECK YOUR CREDIT. Your credit score will give you a sense of the interest rate you're likely to get. This is especially important for borrowers with fair to poor credit (generally below 690), who may face higher rates.
6. RUN THE NUMBERS. Use an auto loan calculator to estimate your monthly car payment to ensure that it fits your budget. For the car price, you can use the true market value.
7. GET PREAPPROVED FINANCING. Apply for a car loan before going to the dealership so you'll know your interest rate. You can still use dealership financing if they can beat the preapproval rate.
8. ROUND UP YOUR PAPERWORK. You'll need to bring the following to the dealership:
- Preapproved loan information.
- Driver's license.
- Proof of insurance.
- Funds for your down payment.
If you're trading in your old car, you'll also need the current title, registration and loan information.

DEALMAKING

If you hate haggling, consider emailing the dealership's internet manager for price quotes. But assuming you're going old school and negotiating in person, here's what to do:

1. TEST-DRIVE THE CAR. Even if you've already decided on a car, test drive it again to verify your choice and confirm it has the options you selected.
2. START THE NEGOTIATION. Tell the salesperson you've shopped around and priced similar models. Then, ask for the dealership's best price. If they won't name a price, make an opening offer at least $1,000 below the true market value price.
3. SEND A MESSAGE. If the salesperson says "I'll take your offer to my boss," don't wait meekly in the sales office. Instead, be unpredictable. Wander around the dealership. Believe me, they'll find you in a hurry.
4. MAKE A COUNTEROFFER. If your first offer isn't accepted, consider raising your price by $250 until you reach an agreement or the true market value price.
5. GET AN OUT-THE-DOOR PRICE. Before you agree to any deal, ask for an out-the-door price with a breakdown of fees and any extras.
6. BE READY FOR UPSELLS. Once you reach an agreement with your salesperson, the finance and insurance manager will draw up the contract. But first, you'll be pitched extras, such as an extended warranty, paint protection and anti-theft devices. Be ready to say "no" or buy these later.
7. REVIEW YOUR CONTRACT. Check the contract for any add-ons you didn't ask for. Make sure the numbers match what you agreed to in the sales office and your own estimates.
8. GET IT IN WRITING. If anything is missing, like spare keys or an owner's manual, or if any work is promised on the car, get it in writing. This is called a "due bill."
9. CHECK THE GAS GAUGE. New cars are sold with a full tank of gas. Check the fuel level before you leave the lot.
There are other ways to buy cars, but this checklist covers the most common dealership transaction. Keep it with you as protection — and a money-saver — the next time you go car shopping.

This article was provided to The Associated Press by the personal finance website NerdWallet. Phil Reed is a writer at NerdWallet.

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